As part of the Government’s fiscal consolidation efforts, expenditure on subsidies has been reduced by 28 per cent.

According to the Ministry of Finance and Planning’s Weekly Fiscal Developments, subsidy payments for the first half of 2025 totalled MVR 1.8 billion, compared to MVR 2.4 billion in the same period of 2024, a year-on-year contraction of 27.7 per cent.

Expenditure rationalisation extended beyond subsidies. Administrative and operational expenses declined from MVR 11.6 billion in 2024 to MVR 10.7 billion in 2025, representing a 7.2 per cent decrease. Total recurrent and capital expenditure fell by 17.4 per cent, from MVR 26.4 billion in the first six months of 2024 to MVR 21.8 billion over the same period this year.

On the other hand, debt servicing costs increased. Financing and interest payments amounted to MVR 2.5 billion, while principal repayments totalled MVR 3.5 billion, bringing total debt service to MVR 6.1 billion, 42.7 per cent higher than the MVR 4.2 billion spent in the corresponding period last year.

Despite the rise in debt servicing, the fiscal balance remained positive. As of 31 July 2025, the overall balance posted a surplus of MVR 314.3 million.

The Government has prioritised fiscal discipline to address structural imbalances, particularly the persistent expenditure overruns seen in previous years. The mid-year surplus is expected to increase confidence in the Maldives’ fiscal outlook.